Small tech stocks soar as the future arrives early

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FASTLY is up more than 310 per cent this year. Zscaler is up more than 180 per cent. Chegg and Veeva are up 75 per cent and 90 per cent. In a tech universe dominated by Apple, Amazon, Microsoft and Google, the share prices of little companies you've probably never heard of are soaring. Read more at The Business Times.

Surveys conducted by Mr Brynjolfsson and economists at the Massachusetts Institute of Technology found that the share of Americans working from home jumped to about 50 per cent this year, from around 15 per cent before the pandemic.

But the trajectory of smaller technology stocks has been even more remarkable. Zoom - the suddenly ubiquitous video conferencing service - has been an investor darling, up close to 500 per cent this year as workplaces shut down. Peloton, the home video cycling company, is up almost 200 per cent amid widespread gym closures - and just added to its product line.

But with in-person meetings wiped out, DocuSign is in demand: Its revenues, in its most recent quarter, grew at a 45 per cent annual pace. The company's shares are up 166 per cent this year.Shares of online retailers Carvana and Etsy are up more than 90 per cent and 140 per cent, as in-person shopping has collapsed. At the end of June, more than 16 per cent of all retail sales were online, up more than 5 percentage points from last year.

"The market, I think, is seeing them now going through the worst recession in history, and the worst pandemic in 100 years, and for those business models to come out stronger was something that a lot of market participants really took note of," said Kyle Weaver, who manages growth-stock portfolios at Fidelity.Normally, during a deep economic downturn, discretionary spending on home furnishings would collapse, Mr Weaver said.

 

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